Municipalities Consider Short-Term Rental Regulation

Sevastopol Town Board will take a first look at draft ordinance Feb. 15

Towns such as Liberty Grove and Sevastopol have started down the long and sometimes rocky road of regulating short-term rental properties (STRs): residential dwellings that are rented for short stays, generally through online lodging marketplaces such as Airbnb and Vrbo.

The state calls such properties “Tourist Rooming Houses” and defines them as vacation homes, cabins and cottages that are rented to tourists and transients for a period of fewer than 29 consecutive days. The definition excludes hotels, motels, bed-and-breakfast establishments, and private boarding or rooming houses.

STR properties have multiplied as their popularity among travelers has increased, setting up many communities for a classic clash between those who believe in unfettered use of property rights and those who don’t want those uses in their backyards. 

The City of Sturgeon Bay and the Village of Egg Harbor headed off some of those battles through local STR regulations that were already on the books. Other communities such as the Town of Baileys Harbor have considered an ordinance but have not taken the leap. 

With 66 STR properties currently operating within Sevastopol’s borders and complaints coming in from STR neighbors, the town felt a need to protect and stabilize its residential neighborhoods, as codified in its comprehensive plan, said Linda Wait, Sevastopol Town Board supervisor and chair of the town’s Plan Commission. 

“We want to do everything we can to preserve the character of many wonderful residential neighborhoods,” she said. “We don’t have an urban center like Baileys Harbor or Sister Bay or [the Village of] Egg Harbor. We have a lot of residential neighborhoods.”

Sevastopol’s reasons for embarking on STR regulation were not unlike those expressed by the Liberty Grove Plan Commission. In January, the town began the process of putting together a draft ordinance that would fit its needs. 

“The proliferation unchecked of short-term rentals could lend a commercializing flavor for what’s intended for single-family zoning areas,” said Nancy Goss, Plan Commission chair. 

Goss said the commission’s members had a “ton of work to do” and intended to take their time, for however long it took, to walk the “razor-thin line” between property rights and community safety, health and welfare. 

Liberty Grove has only just begun its process, but Sevastopol’s Plan Commission has already forwarded its draft ordinance to the Sevastopol Town Board, which will review the document Feb. 15. This first look by Town Board supervisors will be for discussion purposes only, with no decisions made. Public participation is allowed at the board’s meetings.

“We’re not rushing anything through and not trying to hide anything,” Wait said. “We’ve been analyzing this for over two years.”

Sevastopol’s draft ordinance would require all STRs that are rented for more than 10 nights per year to obtain a license from the town. This town license would be in addition to two other licenses that are already required for local STR property owners. 

The first of those is the Wisconsin Tourist Rooming House License, which the Wisconsin Department of Agriculture, Trade and Consumer Protection (DATCP) issues following a property inspection and several other requirements, including a well-water test, according to Kevin Hoffman, DATCP public information officer. 

The second is the permit that the Door County Tourism Zone Commission (DCTZC) issues for the purpose of collecting the 5.5 percent room tax that lodging providers charge directly to guests.

Proof of both of those licenses would be required to obtain the Sevastopol license. Other regulations of the draft ordinance address parking, pets, signage and property use. According to the draft, STR owners must also live within 75 miles of the property or have a valid, registered agent located within Door County. The contact information for that owner or agent must also be provided to any property within 200 feet of the STR. 

If a private onsite wastewater treatment system (POWTS) services the property, the STR’s occupancy is limited to the number of occupants for which the POWTS is designed, as regulated by the state and enforced by the county. John Teichtler, Door County sanitarian, said that means 75 gallons per day per person, with a cap of two people per bedroom. 

This requirement is not particular to STRs, which have no particular POWTS requirements. Instead, it applies to all one- and two-family homes, regardless of the home’s use. Teichtler’s department sends notices every three years that require property owners to have their septic system checked and to verify that inspection with his department.

View Sevastopol’s draft short-term-rental ordinance>>

The Sevastopol license would cost $500 for the initial license and $350 for the annual renewal license. This additional cost may be a point of contention for some STR property owners, but the regulation that has drawn the most attention – and the one that sets Sevastopol apart from Sturgeon Bay or Egg Harbor, for example – is a prohibition from renting an STR property for fewer than six consecutive nights. 

Wait said the six-night minimum-stay requirement would “work best toward preserving those residential qualities” the town wants to preserve. 

STR property owners said a six-night minimum would, in essence, shut down their business.

“The way travelers travel, they don’t have six nights,” said Sturgeon Bay resident Kelly Avenson.  

Avenson derives her livelihood from managing eight STR properties and owning two, all marketed through Airbnb. All but a few of those are located within the City of Sturgeon Bay, and one is in Sevastopol. She said only three reservations during the past two years have been for a six-night stay. The majority of her reservations are for three nights or fewer.

Kristine Rowe, another STR property owner, said a six-night minimum would wipe out more than half her business. 

“We just don’t get that many that book for six nights or more,” she said.

Rowe, an Appleton resident, owns a duplex with her daughter, Kayla Gensler, who lives year-round in Liberty Grove. They use one of their units for long-term rentals and the other for STRs. If half their business was regulated out of existence with minimum-night caps, affordable lodging options would also be eliminated for those who want to travel to Door County for a vacation.

“We have a lot of young families come,” Rowe said. “Other housing options are out of their budget. Also, we have a full kitchen. So for a family with children, that also makes a trip to Door County affordable because they can cook in the unit.” 

Rowe has been following the process in Liberty Grove, where her STR property is located, because the Liberty Grove Plan Commission is using the Sevastopol draft ordinance as a model. Liberty Grove is also highlighting water-quality protections through properly maintained and functioning wells, and through STR occupancy limits that don’t exceed the capacity of septic systems.

“We want to have monitoring available to make sure the short-term rentals that are being rented out are being rented out at the sanitary system they’re intended for,” Goss said during the commission’s Jan. 27 meeting. 

Rowe said she gets the impression that town officials believe that all STR property owners are irresponsible.  

“I’m a responsible property owner,” Rowe said. “I’m certainly not going to put my well and septic at risk.”

Although Rowe and other STR property owners may do everything by the book, an analysis provided by Sevastopol found that only 56 percent of the STRs within its borders had the required state DATCP license. Sevastopol also analyzed information that seemed to indicate that not all STRs with DCTZC permits had DATCP licenses, and that some STRs were advertising occupancy limits that seemed to exceed POWTS requirements. 

Walworth County, where Lake Geneva is located, adopted a countywide STR ordinance in 2018 to prevent its communities from going it alone. That consistency may make STR regulation an easier road to travel, but it’s not always the preferred route.

“Our communities,” said Wait, who used to serve as a supervisor on the Door County Board, “are unique. So what’s fair for one isn’t fair for another.”

Timeline for Town of Sevastopol’s Short-Term Rental Ordinance 

Public participation is allowed at all meetings

• Feb. 15: The Town Board will review the draft ordinance crafted by the Plan Commission.

• Feb. 23: The Plan Commission will consider any feedback received following the Town Board’s Feb. 15 review. 

• No board meeting is scheduled in March.

• April 19: The Plan Commission’s Feb. 23 revision will return to the Town Board. If the board has no changes, a public hearing will be scheduled for the Town Board’s first meeting in May.